Whenever one thinks of learning about the stock market, learner would encounter with some of the terminologies related d to the same. These common terms have been often used by marketers. Today, let us define these jargons for you. It’s not that difficult to understand
- Share: The name itself suggests, it is a part or portion of ‘equity’ in company which enables holder, a right to hold specific proportion in the profit and loss of the company. It is also called ‘stocks’.
- Type of Share: There are two types of share as far as company’s share capital is concerned.
- Preferential Share: A holder of such shares would get benefit of liquidation after paying off debts. Preferential shares are privileged normally observe and therefore the holder of a similar get initial paid out when paying of all the debts when company decides to liquidate . Also, discriminatory shareholders don't have any vote rights.
Their differentiation are based on various ways such as payment of dividends, company' internal structure, terms of maturity and the other. Let' take a note of the same with below
- Non-participating preferred Share
- Convertible preferred Share
- Irredeemable preferred Share
- Redeemable preferred Share
- Non-cumulative preferred Share
- collaborating preferred Share
- additive preferred Share
- Non-convertible preferential Stock
- Equity Share: These shares are not preferential but, ordinary one. A holder of the same has right to vote in the process of decision making of the company along with receiving the dividend on the profit of the company. These can be traded on the Share Exchange markets and company can issue the same on real or face price cum value.
- Investor: A Person who buys and sale share are known as investor. However, investors are not limited to invest in the shares only. There are types of products available for them to invest apart from share Such as debts, credit notes, fixed deposited etc.
- Volume of Trade: Total Number of shares traded on particular day is called Volume of Trade.
- Finance: When it comes to the word finance and stock market, many become skeptical about these terms and think of leaving these terminologies aside and refer something easy. But, in reality it is not like that. These terms are relatively easy. When there is flow of “funds”, the word finance comes to picture. It is basically the inflow and outflow of the funds. In short, it is a proper management of money, debt or credit. Hope, this term is clear now.
- Broker: When a transaction is placed (buy and sale of the share) by the person or institute on behalf of the investor, that person or institute generally refer as a "Share Broker" or "Agent". An investor needs pay charges or commission on the transaction value to the broker. It is a normal practice in the market to appoint broker.
- Portfolio: It is the assembly of the total stock available with an investor.
- Bull Market: When Prices of stocks are higher it is called bull market.
- Bid Amount: The Specific amount an investor willing to pay for the stock is called bid amount.
- Bear Market: If the prices are going down then it is called bear market.
- Ask Amount: It is an amount investor willing to sale the stock at.
- Intra Day: When an investor buy and sale the stock on the same before the closing hours, then it is called Intra Day Transaction.
- Market Capitalization: The sum of total number of share value (Current) in the market is called the same.
- Index: To measure the market performance on different levels, investors and agents use this parameter. Sensex and Nifty are popular indexes.
- Mutual Fund: A mutual fund could be a company that brings along cash from many of us and invests it in stocks, bonds or different assets. The combined holdings of stocks, bonds or other assets the fund owns are called its portfolio
- Initial Public Offering: When an investor directly buys the share from the original issuing company is called IPO. It is when a company, very first time offer their share to sale.
- Dividend: It is a profit on the equity shares. Company may pay this amount to the investors on prescribed time.
- Stock Market: It is a place where buying and selling of stocks take place. At present, Investors use different online modes to buy and sale stocks.
- Liquidity: A speed or easiness at which a given stock can be sold or bought is called liquidity.
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